Indxx is a company that endeavors to deliver innovative solutions to the investment management community at large, ranging from end-to-end indexing solutions to index services and technology products. Pulse 2.0 interviewed Indxx President and Co-CEO Rahul Sen Sharma to learn more.
Sen Sharma’s Background
Sharma has always been interested in the markets. Rahul Sen Sharma recounted the story of how he got started in the industry.
“When I was 11 years old, after lots of research (as much as I could do as an 11-year-old), I tried to convince my father to invest in what I thought was a great company named Berkshire Hathaway. I really liked their business model, leadership, and management style. After about a year, during which time he initially laughed off my suggestion, then became intrigued, and when he finally asked his financial advisor about it, he bought one share. That really kicked off my interest in finance, research, and investing. Even though I’ve worked in a number of different countries, continents, and industries, it’s always been close to my heart.”
Formation of Indxx
On Indxx’s beginnings, Sharma shared, “After working in the music industry and fashion for a few years, I went back to school for my MBA and, after a few years in the industry, eventually found myself running investment research at a Registered Investment Advisor (RIA) in New York City. While I was there, we transitioned many of our investment models away from active management and more into passively managed Exchange Traded Funds (ETFs).”
“I could tell that this is where the industry was going and that trillions of dollars over the next few decades were going to make this move as well. At the same time, many smaller ETF issuers were having a lot of trouble getting support from the existing large indexing firms out there. The ETF issuers wanted custom-built strategies, but it was taking too long and costing too much for them. We built Indxx at the time to solve this core problem and to build top-quality indices quickly and cost-effectively. Twelve years later, that problem is still one that we solve, only now it’s on a global scale. We’ve also built out a number of business divisions to offer support services. Together, we have more than 220 employees globally working at Indxx across six offices.”
Reflecting on Indxx
Sen Sharma’s favorite memory at Indxx is rooted in their client outreach.
“My most fond memory is when Indxx signed on our first client and oversaw our first launch. That feeling when you see an ETF trading on a major US exchange tracking your index and seeing your company’s name up there is really something. Today, we have more than 112 funds tracking our indices globally, and every new launch is exciting, but that first one was the most memorable.”
“I’ve also loved spending time with my colleagues and solving problems— thinking out of the box. Sometimes it seems insurmountable, but if you have a great team and go step by step, you can (almost always) figure it out.”
Challenges
Through building the company and developing its product and service offering, Sen Sharma reflected on the initial challenges faced.
Sen Sharma acknowledged, “As an entrepreneur, it’s all on you. There’s no boss to ask what to do. At the same time, there’s also no boss telling you what to do, so freedom is the upside.”
Core Products
Indxx’s core products and features, as explained by Sen Sharma:
“Indxx has grown a lot over the years, and we’ve launched a number of new business divisions in that time to support our core indexing business. For example, in addition to building custom indices for our clients, we also have our own internal product development team that creates indices that we think are interesting, and then we find a partner. We call this our ‘Indxx Indices’ branded business. We recently also launched two unique data and technology products, based on the challenges we ourselves have faced in certain areas, and are licensing those products to various types of companies as well. One is focused on corporate actions and is called CAdmin.”
“The other is a unique and proprietary classification system which we have named the ‘Indxx Thematic Industry Classification System’ (ITICS). With ITICS, we classify more than 10,500 publicly traded companies in the global investable universe based on their revenue into more than 450 themes, all with more than five years of historical data as well. I don’t think any other company in the world could have done these products— and we have more in the pipeline. We are getting a fantastic response from the market already. Our team of 200 people across four offices in India, coupled with our technology and company culture, gives us something truly special.”
Technological Evolution
Regarding Indxx’s innovative approach to harnessing technology, Sen Sharma noted:
“When we first started our business, so much was done on spreadsheets, and a lot was manual work as well. But that’s not scalable—today, so much of what we do is using cutting-edge technology. We’re in a really great space because, since we’re such a new company, we don’t have legacy systems or processes slowing us down. Everything has been built by us and our IT team internally. It’s been so successful that we are starting to launch products based on our own technology, which is being used by other companies in the industry. Companies have been coming to us for our help with updating their technology as well.”
Most Significant Milestones
Sen Sharma shared some of Indxx’s most significant milestones, citing the top 5:
1.) Recognition by our industry and peers for awards.
“Since we won our first award, for innovation, in 2017, we’ve been fortunate to have won another 12, including, last month, Index Provider of the Year for the second year in a row. So much of our business is from existing clients, so that, coupled with these awards, means so much to us as an organization.”
2.) Our very first product launch in the US.
“As stated before, this was the inception of our company and helped establish ourselves as a go-to solution provider for fund issuers in the United States.”
3.) Our first product launch outside the US.
“Becoming a business with a global client footprint is something that we’ve worked hard to achieve. While it also comes with its own unique set of challenges, such as different regulations, time zone coverage, and language barriers. Today, we have clients in Canada, Europe, Central and South America, Israel, Japan, South Korea, Australia, and across APAC.”
4.) The first product tracking one of our indices to have more than $1 billion in assets under management.
“Today, we have a number of these, but the first was in 2017, and it was such a special moment to see all those zeros!”
5.) Opening our second US office in Miami.
“We’ve had an office in NYC since 2011, and we have four offices in India. Having said that, I was personally very excited to open our Miami offices in 2020. We started with shared office space and moved into our own private and custom-built offices in November 2022.”
Redefining Success
In terms of success stories, Sen Sharma commented:
“Rather than focus on a specific story or stories, I’d just say that we’ve always looked at our clients as partners. When you do that, they see it and truly appreciate it. It has allowed us to build long, trusting relationships with companies that we are very fortunate to work with. And when you have that long-term focus with the right partner, just like in any relationship, success follows.”
Indxx Funding/Revenue
“We’ve been consistently profitable for many years now. When we started our business, we didn’t take on any outside investors, and we have no debt. Not having access to a line of easily available cash at our beginning forced us to have a bootstrap mentality that we’ve worked hard to maintain.”
Different League
Put simply, Indxx stands out from its competition as Sen Sharma affirmed:
“Indxx workplace culture is one-of-a-kind. As you can probably gather by now, it’s not one or a few differentiators, it’s that our entire culture and global focus is different and sets us out from the pack.”
Bright Future
With a full product pipeline and a hyperfocus on innovation, Indxx has a long-term outlook. Sen Sharma concluded:
“We’re in a growing and dynamic global industry,” Sen Sharma said. “Other than, of course, continued growth and new product lines, we want to start educating people about what it is that we do and who we are. We’ve already started that in a small way with our Indxx Academy and certification program. We have a course that we do with some of the top schools in India with students who are nearing graduation. We teach them all about indexing over four modules, and also offer jobs to the best achievers. We’re now starting to think about how to educate the public globally about what we do and why it matters.”
